Zinc prices increased by 0.84%, closing at Rs 377.30, bolstered by constricting near-term supply conditions and positive manufacturing data from key economies. Market sentiment showed signs of improvement as manufacturing indicators from China, Europe, and the United States suggested ongoing industrial resilience in the face of elevated input costs. However, gains remained constrained by rising tensions in the Middle East, which heightened inflation concerns and expectations of sustained high interest rates, while China’s GDP growth decelerated to a 3.5-year low, underscoring ongoing weakness in domestic demand.

Fundamental developments indicated a varied perspective. In May, China’s zinc production saw a year-on-year increase of 9.4%, reaching 640,000 metric tonnes. Concurrently, inventories in warehouses monitored by the Shanghai Futures Exchange rose by 0.6%, suggesting a comfortable domestic supply situation. China’s central bank recognised the structural imbalance in the economy characterised by robust supply juxtaposed with subdued demand. It reaffirmed its dedication to sustaining an accommodative monetary policy aimed at stimulating consumption and bolstering economic growth. Supply-side disruptions persisted in offering fundamental support for prices.

Glencore’s Kazzinc facility in Kazakhstan continues to experience diminished operations as a result of an explosion, whereas Nexa’s Cajamarquilla smelter in Peru is in the process of gradually restoring production following interruptions caused by a fire. Concerns continue regarding diminished output from Boliden’s Garpenberg mine in the aftermath of seismic activity. The International Lead and Zinc Study Group reported that the global zinc market surplus narrowed to 26,500 tonnes in April from 56,300 tonnes in March, although the market remained in a 145,000-tonne surplus during the first four months of the year. Goldman Sachs anticipates a slight global surplus in 2026, followed by a deceleration in supply growth in the years that follow.

Technically, zinc is experiencing renewed buying interest, as evidenced by a 3.49% increase in open interest alongside rising prices, suggesting the establishment of new long positions. Immediate support is identified at Rs 375.30, with subsequent support at Rs 373.20. Resistance levels are established at Rs 378.90 and Rs 380.40. A sustained move above resistance could extend the upward trend, while a break below support may invite profit booking.